Organigram Reports Record Second Quarter Fiscal 2025 Results

   -- Record gross revenue of $102.8 million and record net revenue of $65.6 
      million 
 
   -- Adjusted EBITDA1 of $4.9 million 
 
   -- Net income of $42.5 million 
 
   -- Increase in anticipated Motif cost synergies to $15 million from $10 
      million 
 
   -- Total cash position of $83.4 million2 and negligible debt 
TORONTO--(BUSINESS WIRE)--May 12, 2025-- 

Organigram Global Inc. $(OGI)$ (TSX: OGI), (the "Company" or "Organigram"), Canada's #1 cannabis company by market share, announced its record results for the second quarter ended March 31, 2025 ("Q2 Fiscal 2025"). The Q2 Fiscal 2025 results include a full quarter of consolidated financials from the Company's acquisition of Motif Labs Ltd. ("Motif") on December 6, 2024.

Q2 FISCAL 2025 HIGHLIGHTS

   -- Gross revenue increased 79% to $102.8 million from $57.4 million in the 
      same prior year period. 
 
   -- Net revenue increased 74% to $65.6 million from $37.6 million in the same 
      prior year period. 
 
   -- International revenue increased 177% to $6.1 million from $2.2 million in 
      the same prior year period. 
 
   -- Adjusted gross margin1 increased to $21.9 million or 33%, from $11.6 
      million or 31% in the same prior year period. 
 
   -- Motif integration now expected to exceed original estimate of $10 million 
      to provide approximately $15 million in annual cost synergies. 
 
   -- Adjusted EBITDA1 increased to $4.9 million from $(1.0) million in the 
      same prior year period. 
 
   -- Total cash position of approximately $83.4 million2 and negligible debt. 
 
   -- Maintained #1 market share position in Canada -- #1 in vapes, #1 in 
      pre-rolls, #1 in milled flower, #1 in hash, #1 in pure CBD gummies, #3 in 
      edibles, #3 in dried flower3. 
 
   -- Acquired Collective Project Limited ("Collective Project"), marking entry 
      into the fast-growing U.S. and Canadian beverage categories, with current 
      distribution in 10 states and six provinces. 
 
   -- Closed third and final $41.5 million tranche of $124.6 million follow on 
      investment from BAT. 

"Our record revenue this quarter reflects the strength of our brands and our ability to execute across both domestic and international markets," said Beena Goldenberg, Chief Executive Officer. "We are unlocking meaningful global growth potential -- from increasing sales into key international markets like Germany, to our entrance into the U.S. hemp-derived beverage space. We expect this momentum to continue as we further strengthen our leadership in Canada and head into the seasonally stronger back half of the year."

SECOND QUARTER FISCAL 2025 FINANCIAL OVERVIEW

   -- Net revenue: 
 
          -- Net revenue increased 74% to $65.6 million, from $37.6 million in 
             the second quarter ended March 31, 2024 ("Q2 Fiscal 2024"), 
             primarily driven by contributions from the Motif acquisition, as 
             well as organic growth in recreational and international sales. 
 
   -- Adjusted Gross margin4: 
 
          -- Adjusted gross margin was $21.9 million, or 33% of net revenue, 
             compared to $11.6 million, or 31%, in Q2 Fiscal 2024. The increase 
             was primarily attributed to higher average selling prices, product 
             mix, and higher international sales. 
 
          -- The adjusted gross margin of 33% in Q2 Fiscal 2025 reflects 
             Motif's margin before full synergy realization. Organigram's 
             standalone adjusted gross margin excluding Motif was 37% in the 
             quarter. Management expects adjusted gross margin to improve over 
             the coming quarters as Motif acquisition related synergies are 
             realized. 
 
   -- Selling, general & administrative ("SG&A") expenses: 
 
          -- SG&A increased 11% to $22.5 million from $20.3 million in Q2 
             Fiscal 2024. The increase was attributable to the inclusion of 
             Motif SG&A in our consolidated financials as well as higher trade 
             investments to support the growth of the business. 
 
          -- As a proportion of net revenue, SG&A decreased to 34%, compared to 
             54% in Q2 Fiscal 2024, reflecting improved operating leverage. 
 
   -- Net income: 
 
          -- Net income was $42.5 million compared to a net loss of $27.1 
             million in Q2 Fiscal 2024. The increase in net income from the 
             prior period is primarily attributable to higher fair value gains 
             recognized in relation to top-up-rights of BAT and other financial 
             instruments. 
 
   -- Adjusted EBITDA4: 
 
          -- Adjusted EBITDA was $4.9 million compared to $(1.0) million in 
             adjusted EBITDA in Q2 Fiscal 2024. The increase was primarily 
             attributable to higher recreational sales, including Motif 
             contributions, international revenue, and operational efficiency 
             gains. 
 
   -- Net cash used in operating activities before working capital changes: 
 
          -- Net cash used in operating activities was $1.6 million, compared 
             to $8.3 million cash used in Q2 Fiscal 2024. The decrease was 
             primarily attributable to higher adjusted gross margin4 in Q2 
             Fiscal 2025. 

"Our Q2 results continue to demonstrate our growing scale. We have made incremental investments into Motif which have allowed us to further increase the expected synergy realization up to $15 million annualized from our prior estimate of $10 million. Furthermore, through targeted investments in working capital we are in a good position to capitalize on our seasonally stronger months in the second half of the year," said Greg Guyatt, Chief Financial Officer. "With a roadmap for improving gross margins, and growing contribution from higher-margin international sales, we see a clear path to sustained profitability and continued financial strength as we balance growth and controlling costs."

CANADIAN RECREATIONAL MARKET INTRODUCTIONS

As Canada's market leader in recreational cannabis, Organigram remains committed to delivering consumer focused innovations and products to its customers. Some notable recent highlights include:

Edison Sonics - 4 x 2.5mg FAST$(TM)$ nanoemulsion gummies in Apple Berry Smack flavour

BOXHOT Diamond Doobies - 2 x 0.5g coated infused pre-rolls available in Apple 3.14 (pi), Pineapple Express, and Tangerine Scream

SHRED - 5 x 0.4g Cherry Crusher Heavy Slims infused tube-style pre-rolls

Monjour - FAST(TM) now available for pure CBD Monjour gummies

New Seed-Based Cultivars - GMO Kush and UK Cheddar Cheese

Trailblazer M'mosa - Premium hang-dried flower, hand-groomed, smart cured, and hand-packed in a glass jar

Trailblazer Slim Blunts - Sativa tube-style pre-rolls wrapped in tea leaf paper for a smooth, citrus-y flavour

Debunk Uncut Gems - Liquid diamond 510 vape

RESEARCH AND PRODUCT DEVELOPMENT

Product Development Collaboration ("PDC")

   -- Organigram and BAT continue to collaborate through the PDC to research 
      and develop innovative technologies in the edible, vape and beverage 
      categories in addition to new disruptive inhalation formats aimed at 
      creating solutions to addressing the biggest consumer pain points that 
      exist in the category today. 
 
   -- Organigram has commercialized the first product resulting from PDC 
      research -- Edison Sonics: gummies utilizing Organigram's Fast Acting 
      Soluble Technology (FASTTM). 

Follow-on Strategic Investment from BAT and creation of "Jupiter" Strategic Investment Pool

   -- On November 6, 2023, Organigram announced a $124.6 million follow-on 
      investment from BAT and the creation of "Jupiter", a strategic investment 
      pool established to expand Organigram's geographic footprint and 
      capitalize on emerging growth opportunities. 
 
   -- The final $41.5 million tranche closed in February 2025. 
 
   -- $59 million of the Jupiter fund remains available to support continued 
      expansion in the U.S. and other international markets in compliance with 
      applicable laws. 

JUPITER STRATEGIC INVESTMENT POOL

   -- Organigram made its first significant European strategic investment to 
      expand its presence in the European cannabis market with a $21 million 
      investment in Sanity Group GmbH ("Sanity Group"), a leading German 
      cannabis company. Our investment in Sanity Group was supported by an 
      expanded supply agreement, making it one of our largest customers. Since 
      the April 1, 2024 expansion of Germany's medical cannabis program, the 
      market has grown at least 4x and continues to show strong growth 
      potential. Sanity Group is uniquely positioned, having already submitted 
      applications for adult-use recreational pilot projects in Berlin, 
      Frankfurt, Düsseldorf, and Bremen. Approval is pending from the 
      Institute of Food & Nutrition, which oversees the pilot projects. 
 
   -- Jupiter has also deployed US$2 million into Steady State LLC (d/b/a Open 
      Book Extracts), a U.S.-based company specializing in hemp-derived 
      cannabinoid ingredients. 

OTHER INTERNATIONAL INVESTMENTS

   -- Prior to the establishment of Jupiter, Organigram had already made a US$7 
      million strategic investment in U.S.-based Phylos Bioscience Inc., a 
      leader in seed-based technology. The Company expects to further leverage 
      lower-cost seed-based technology over time. 
 
   -- On March 31, 2025, Organigram acquired Collective Project, which enabled 
      it to enter the beverage category, with hemp-derived THC beverage 
      distribution in 10 U.S. states and THC beverage distribution in six 
      Canadian provinces. 
 
   -- Organigram is exploring additional U.S. and international investment 
      opportunities that align with the Company's strategy to establish itself 
      as a global leader. 

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